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By Euan Paulo C. Añonuevo, Reporter
DISTRIBUTION utilities like the
Manila Electric Co. (Meralco) may now recover power generation and
foreign exchange-related costs automatically after the Department of
Energy amended the implementing rules and regulations (IRR) of the
Electric Power Industry Reform Act (Epira) for this purpose.
This revision effectively
sidesteps an earlier Supreme Court decision voiding previous rate
adjustments made without the benefit of public hearings.
“The implementation of
automatic recovery mechanism will shield consumers from the burden
of additional cost given that consumers are often subjected to
additional costs because of interests on deferred charges. This way,
we will be able to balance the need for consumer protection,
observance of due process and enabling businesses to become
financially viable,” Energy Secretary Raphael P.M. Lotilla said in
a statement.
The move is expected to alleviate
the woes of distributors like Meralco, which has been deferring its
payments to its power suppliers because of an inability to collect
these charges in a timely manner.
The amendment to Section 4(e) of
Rule 3 of the Epira-IRR will now allow the timely recovery of
generation and foreign exchange-related costs while Section 7 of
Rule 18 provides the extension of exemption of self-generation
facilities from the payment of universal charge for three years
starting June 30, 2007.
However, the implementation of
the automatic recovery mechanism would still be subject to
subsequent verification and close monitoring by the Energy
Regulatory Commission (ERC) to assure appropriate recovery of
charges.
This will also provide ERC more
time to attend to other equally important rate applications, Lotilla
said. Under the current system, if all distribution utilities will
apply monthly to adjust generation rates, the ERC will be swamped
with approximately 1,680 applications and hearings in various
localities in a year.
Lotilla said the extension of the
exemption of self-generating facilities from the payment of the
universal charge would allow large electricity users to take steps
to improve the cost efficiency of their operations and at the same
time provide for their own power requirements.
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